Open a line of credit with a credit card or purchase a small piece of property?
I want to improve my credit score to buy a home. I've always paid cash, so I have no credit cards or car loans. The lender recommended I open a line of credit with a credit card company and make small purchases and pay them immediately. I'd rather purchase a small piece of property here in my town and make payments on the loan to improve my credit. What would be a better choice, open a line of credit or purchase a small lot and make payment s on a small loan for it? Thank you for any advice!
I think you should be congratulated for not using credit and paying cash. You don't have to improve your credit score to get a mortgage, do some research and find a mortgage company that will do Manual Underwriting. Which means you can bring in proof of your ability to pay your bills on time (rent receipts, bank statements, receipts for large purchases, etc.) as a basis for a loan. Playing with credit cards like your lender is suggesting is like playing with snakes, no matter how careful you are eventually you will get bitten.
Thank you dburkeaz! I will do exactly what you suggested, ask for a Manual Underwriting. I thought there had to be another way, but I didn't know what key words I needed. Thanks again!
Good move Msmillar, credit cards and the FICO score are the bane of the middle class.
Why not do both? Open a few credit cards with low lines of credit, such as $500, and make those payments immediately.
If by buying a piece of property, you mean to build on that property, then by all means do so.
A combination of a few conservative credit cards and a small mortgage payment will build up your credit score nicely. Track your score and cancel the credit cards once the score gets high enough.
Otherwise, I agree with the other post. Go shopping for another lender. Also keep in mind that the ability to pay is based on both income and assets (which reflect the ability to repay the loan in case income goes down), so building your savings also will improve your ability to get a loan.
by Uneducated opinio 13 years ago
Try and refrain from using a credit card for any purchases that are not a necessity. Things want should he paid in full to avoid getting stuck in ungodly amounts of debts. I learned this lesson a little late but I did learn it ha. Try to be smart with your money. Also try to look for coupons online...
by Gary Anderson 15 years ago
I just wrote a hub on this, but what I want is to have a discussion here. This is the issue: the senate voted on 5/19 to forbid the states from setting caps on interest rates for credit cards. The injustice of this is that the state in which the credit cards are issued, namely South Dakota and...
by Gus Ahmed 14 years ago
If you pay off credit cards by getting a loan out, aren't you in the same position still?Maybe a loan won't have interest increase like credit cards, but what is the best way to get out of this situation for good?
by Joms2011 13 years ago
I could hardly imagine how some would have lived with it !?
by chan0512 7 years ago
Do you use credit card? If yes, what is the best credit card?I like my 2% cashback FIA Fidelity Amex CC.
by Cliff Beaver 13 years ago
What is the best way to pay off credit card debt?I don't personally have any major credit card debt, and the debt that I do have is under control. However, I know some people who have let their credit cards get out of hand and I'm sure there are people searching for ways to pay it off. So I ask...
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